There’s good news for Alabamians who may be interested in a reverse mortgage. FHA is continuing the $625,500 ceiling on home values for reverse mortgage purposes. The limit for Alabama homes was $200,00 just seven years ago.
This $625,500 is a nation-wide amount, which favors Alabamian reverse mortgage prospects. In high value property states (such as California, Hawaii, New York, etc.) the average home value is much higher than Alabama, therefore a higher percentage of homes in those states are above the $625,500 valuation cap. Our state has a lower, more reasonable property values across the board, so a much smaller number of homes will be above the valuation cap. Homes above the $625,500 value are still eligible, their value for the purposes of a reverse mortgage are capped at $625,000.
Birmingham reverse mortgage prospects — particularly those in Mountain Brook, Vestavia, and Homewood — are the most likely to exceed the ceiling. Mobile reverse mortgage prospects, especially those in Baldwin County, with it’s beach and water properties, will also see a higher percentage of homes above $625k.
The average home value across Alabama is approximately $123,000, whereas Hawaii ($500,000+) and California ($350, 000+) have a substantial number of homes above the $625,500. Again, homes above $625,500 are still eligible, they are just capped for valuation purposes at $625,500. Every year, McGowin-King helps a number of Alabama reverse mortgage borrowers with higher value homes. All the benefits of a FHA reverse mortgage apply to them as well.